Valve guilty of violating Australian law for not offering Steam refunds

Valve, the company behind PC games distribution platform Steam and the upcoming HTC Vive virtual reality headset, has been found guilty of violating Australian consumer law for not offering refunds on Steam.

The Australian Competition and Consumer Commission (ACCC) filed suit against Valve back in 2014, before it established its current refund policy, which allows users to obtain a refund within two weeks of purchase and with less than two hours of playtime. The ACCC argued that the lack of refund policy broke consumer law, which states that if a product is faulty or of unacceptable quality consumers have a right to a refund, repair, or replacement.

At the time, Valve disputed that it officially did business in Australia, saying that it only provided online access to video games via a client. This, it argued, did not qualify as "goods" under Australian consumer law. The company also argued that the Steam Subscriber Agreement fell under the law of the state of Washington in the US, not the law of Australia.

The Australian Federal Court, however, disagreed. It found Valve "engaged in misleading or deceptive conduct and made false or misleading representations to Australian consumers," as well as effectively modifying statutory guarantees and/or warranties due to the language used in the Steam Subscriber Agreement.

"The Federal Court's decision reinforces that foreign based businesses selling goods and/or services to Australian consumers can be subject to Australian Consumer Law obligations, including the consumer guarantees," ACCC Chairman Rod Sims said in a statement.

Further Reading

"In this case, Valve is a US company operating mainly outside Australia, but, in making representations to Australian consumers, the Federal Court has found that Valve engaged in conduct in Australia. This is also the first time Courts have applied the extended definition of 'goods' to include 'computer software' in the ACL. It will provide greater certainty where digital goods are supplied to consumers through online platforms."

A hearing for relief will be held on April 15, which may include monetary damages.

While Valve's Steam platform has been around for over a decade, it wasn't until June of 2015 that the company finally implemented a blanket refund policy. Previously the company had only offered refunds under extreme circumstances. Consumers welcomed the move, but some developers argued that for shorter games, which can be completed in under two hours, certain troublemakers might use the refund policy as a free rental service.